What is Vendor Managed Inventory (VMI):

 

There are different versions of Vendor Managed Inventory (VMI) as part of the supply chain, but in WMS terms it is usually associated with a supplier owning the inventory in a customer’s warehouse or DC until an event triggers a change. A classic example is a hard drive maker owning the inventory until a drive is inserted into a PC or laptop computer, which triggers a change in ownership from the drive maker to the computer manufacturer, and a corresponding invoice is created.

There are some other permutations of this basic theme. The supplier is also generally responsible for maintaining adequate inventory levels at its customers’ locations. Not all WMS solutions support this type of VMI.